AbraSilver Resource has finalised an option and joint venture (JV) agreement with a subsidiary of Teck Resources to explore and develop its La Coipita copper-gold project in Argentina.
Covering an area of more than 70,000 hectares in San Juan Province, the La Coipita copper-gold project lies within the Miocene porphyry-epithermal belt.
Under the agreement, Teck Resources will have the option to acquire an 80% interest in the La Coipita project by investing $20m (C$26.66m) in exploration over five years as well as making cash payments and equity placements in AbraSilver totalling $3m.
Teck will be required to make an upfront cash payment of $500,000, a further $1m by January 2025 and then $1.5m by January 2028.
Additionally, optional cash payments of up to $6.3m to the project vendors are also part of the deal.
Upon exercising the option, a new company will be incorporated in Argentina to hold the project title, in which Teck will own an 80% stake, while the remaining 20% will be held by AbraSilver.
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Both businesses have committed to distributing future costs equally or risk having their stake in the new company diluted.
The deal is subject to finalising a definitive Option Agreement and meeting other conditions.
The two companies plan to enter the Option Agreement by 14 January 2024, but completion is not guaranteed.
AbraSilver president and CEO John Miniotis said: “We are delighted about the opportunity to secure a significant exploration agreement with Teck to advance the large-scale La Coipita project, which is located in a prolific copper porphyry district.
“This strategic collaboration will mark a significant milestone for the project, and greatly enhance the potential for a major copper discovery.
“This transaction will represent a strong endorsement of the exploration potential at La Coipita and we look forward to working closely with Teck to unlock value for all stakeholders.”